Last updated: February 1, 2013 5:36 pm

US carmakers defy slow economy

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All three US carmakers defied the slowing economy in their January US sales, with General Motors and Chrysler both announcing 16 per cent year-on-year US sales increases and Ford Motor 22 per cent.

The performance marked an improvement on the performance of all three in December and outpaced the 14 per cent year-on-year growth of wider US car sales, which also includes data from non-US manufacturers. The key seasonally adjusted annual sales rate was 9.2 per cent higher than last January, at 15.5m units.

Sales for Japan’s Toyota, the third-biggest seller of cars in the US after GM and Ford, rose still more rapidly at a year-on-year rate of 26.6 per cent.

Michelle Krebs, senior analyst at Edmunds.com, the car information site, said January’s strong sales partly reflected pent-up demand to replace ageing models. US cars currently average 12 years old. Credit was also widely available, she added, and carmakers had “compelling new product offerings”.

Pick-up trucks – where US carmakers have a disproportionately high market share and high profit margins – performed especially well because of the housing market recovery, Ms Krebs said. Sales of Ford’s F Series pick-up, the best-selling individual vehicle in the US market, were 22 per cent up on a year ago.

Kurt McNeil, GM’s vice-president of US sales operations, said the year was off to a “very good start”.

“There’s a sense of optimism among our dealers that only comes when you pair a growing economy with great new products,” Mr McNeil said.

Ken Czubay, Ford’s vice-president of US marketing, sales and service, singled out strong sales of the new Fusion sedan – up 65 per cent on last January – and the Escape SUV – up 16 per cent – as evidence the company was off to a “strong start”.

Ford’s and GM’s growth marked a significant acceleration from the companies’ sales in December, when GM, the biggest US carmaker by sales, grew 5 per cent and Ford grew 2 per cent.

The biggest domestic manufacturers’ key luxury brands performed very differently, however. GM’s Cadillac luxury brand, which it has spent billions of dollars reviving, reported its strongest January retail sales in 23 years, with sales up 47 per cent year on year. However, Ford’s Lincoln brand, which is continuing its relaunch efforts with an ad during Sunday’s Super Bowl TV coverage, suffered an 18.9 per cent year-on-year sales fall, exacerbated by shortages of its new MKZ sedan.

Chrysler’s 16 per cent growth represented the slowest improvement for any of Detroit’s Big Three, after growing 10 per cent year over year in December.

Ms Krebs said Chrysler, which is controlled by Italy’s Fiat, had suffered from a 70 per cent decline in sales of the Jeep Liberty, which dragged down Jeep sales 4 per cent year on year. Jeep has been key to Chrysler’s recovery from its bankruptcy in 2009.

Ms Krebs said the replacement for the Liberty, due to be unveiled in March at the New York Auto Show, could not hit the market soon enough.

“The wind-down of the old Liberty hurt Jeep sales, which have led Chrysler’s revival,” she said. “The freshened Compass saw a sales surge that bodes well for a revamped Liberty.”

Chrysler’s Dodge brand nevertheless reported sales up 37 per cent, boosted by sales of its new Dart compact car and Avenger midsize sedan.

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